Less wage discrimination for women, aboriginals, and visible minorities in public sector, not higher salaries overall: study

October 29, 2014

OTTAWA—Women, aboriginal workers, and visible minority workers experience less wage discrimination in the public sector than in the private sector, says a study released today by the Canadian Centre for Policy Alternatives (CCPA).

The study compares the wages of full-time public and private sector workers and finds significant gaps in the wages of women, aboriginal workers, and visible minority workers. Those gaps are bigger in the private sector in every instance:

University educated aboriginal workers make 44% less than their non-aboriginal peers in the private sector. In the public sector, their wage gap shrinks to 14%.

University educated women working in the private sector earn 27% less than men. Their wage gap in the public sector is 18%.

University educated visible minority workers take home 20% less than their non-visible minority counterparts. In the public sector, their wage gap is 12%.

“Salaries are higher in the public sector precisely for those groups of people who experience the greatest discrimination in the private sector—because the public sector goes further in correcting those discriminatory practices,” says CCPA senior researcher Kate McInturff. “The result is not higher wages but rather a more equitable system of pay.”

According to the study, there are several factors that contribute to the lower levels of wage discrimination in the public sector: higher rates of unionization; pay equity legislation; and more access to benefits such as paid parental leave, family leave, and sick leave.

On average, when you compare occupations that exist in both the public and private sectors, full-time wages in the public sector are 2.3% higher than in the private sector. The reason the bottom line is slightly higher for the public sector is that workers who face less discrimination in the public sector are seeking out those jobs in greater numbers. Likewise, workers who earn bigger paychecks in the private sector are more likely to choose to work there.

“Public sector wages are actually lower for some of the highest paid workers in our economy. The difference in public and private sector wages results from higher levels of discrimination in the private sector and a more equitable system of pay in the public sector,” concludes McInturff.